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Winnipeg Free Press - PRINT EDITION

Bracing for a furniture giant

IKEA will alter local retailing landscape

By: Geoff Kirbyson

Posted: 07/1/2012 4:13 AM | Comments: 0

BORIS MINKEVICH / WINNIPEG FREE PRESS Dufresne Furniture CEO Mark Dufresne sits in his corporate headquarters, which happens to be located near the site of the new IKEA. (WINNIPEG FREE PRESS) Photo Store

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The reports about the impending death of Winnipeg's furniture industry when IKEA arrives this year have been greatly exaggerated.

Contrary to the belief of some, local and national retailers aren't planning to turn off the lights and shutter their doors when the furniture giant opens in November or December.

In fact, some wouldn't be surprised if their sales went up in the long run.

There's no doubt IKEA will be given a hero's welcome when it finally arrives, according to Mark Dufresne, CEO of Dufresne, a Winnipeg-based retailer with four Winnipeg stores, but it may also serve to grow the size of the furniture sector's pie.

"When you get people thinking about their homes and how they're going to decorate them, whether it's to redo them or refurnish them, that's really good for our industry," he said.

"When you go into people's homes, there is a lot of opportunity for them to spend time, money and effort on making the place where they live better than it is today. We really welcome that."

Because IKEA sells more than furniture, Dufresne expects a wide range of retailers to feel the pinch, including Canadian Tire, Rona and Costco.

"I think they'll cut quite a swath, but I don't expect to be affected negatively," he said.

This isn't Dufresne's first dance with IKEA. It shares a parking lot with IKEA in Edmonton, is in the same complex in Calgary and is down the street in Ottawa.

It's the same real estate situation with EQ3. The manufacturer and retailer of modern furniture competes head-to-head with IKEA in Calgary as well as in Toronto, Montreal, Ottawa and Vancouver.

"Everywhere else we do quite well (against IKEA). I'm sure we'll be able to work with them," said Peter Tielmann, EQ3's president and CEO.

EQ3's higher-end offering is at the opposite end of the spectrum from IKEA's "low-end, opening-price stage," he said.

"Our quality is superior and it's all assembled furniture. Our customers see the difference. The market has room for all of us," he said.

In fact, Tielmann and the owners of Design Manitoba say they feel that today's IKEA customer could graduate to their stores a few years from now.

"(IKEA's arrival) is going to heighten the awareness of contemporary design of furniture," said Design Manitoba's John Tinkler. "There are a lot of people in Winnipeg who are very traditional and this will expose them to contemporary design for the first time. It's a great introduction for people."

One of Winnipeg's longest-standing retailers, Brick's Fine Furniture, will make a pre-emptive advertising strike prior to IKEA's ribbon cutting to emphasize its personalized service and the fact it sells Canadian-made goods.

"I won't be advertising so much on price as I will that (shopping with us) will be a good long-term investment," she said.

Brick predicted the medium to low-end retailers will likely be the hardest hit once IKEA arrives. She doesn't share the view that it will increase the size of the furniture market.

"You only have limited room for furniture. You're not going to buy two sofas for your living room," she said.

Dufresne admitted to some jealousy about the sheer volume of concessions, including tax breaks, given to a company that is based overseas. Dufresne employes 90 people at its Winnipeg headquarters and has five other stores throughout the province.

"I think the city and province has done things for them that I wish they'd do for us. We're the locals," he said.

geoff.kirbyson@freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 1, 2012 B4

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